The pressure’s on for countries to honour their climate change commitments. But US President Donald Trump is threatening to tear up the Paris agreement and the UK’s quitting the EU. So where does this leave the green energy sector? Step in crowdfunding, which aims to capitalise
The Paris climate change pact, which entered into force last year, was announced with a huge fanfare. The deal aims to limit the rise in average global temperatures to “well below” two degrees Celsius, compared to pre-industrial levels. It builds on targets already set in Europe years earlier.
But these are turbulent times in politics, amid competing national interests and increasing demands on state budgets. And, if President Trump does turn his back on the historic accord, Europe could be left on its own to lead its future environmental fight.
It all spells uncertainty for getting new green power projects off the ground. But crowdfunding platforms may be the saviour, filling funding gaps and helping to ensure the energy transition remains on track.
“It’s true that Donald Trump seems to be pro-traditional energy, but he’s also pro-business and I think that is good for crowdfunding,” says Jack Jacobs, President of GridShare, a new US equity-based crowdfunding platform for green energy and clean-tech projects. “There are always some sceptics in any new industry. But I am very optimistic that renewable energy is here to stay.
“There are still a lot of incentive programmes from state to state and even in the federal government, but those are definitely tapering back. But that was always the plan. The idea of the incentives in the first place was to encourage people to adopt this amazing technology that will help society. As that goal is achieved, the incentives are slowly reduced. And that’s exactly where we come in, helping developers fill that gap in financing renewable energy projects.”
Across the Atlantic, with the pending Brexit, the UK will now have to meet its climate change goals, without the help of the EU. It is estimated that Britain currently has an 80 percent share of Europe’s crowdfunding market, so – like in the US – the potential for boosting green energy through this kind of funding is there.
“Ironically, the Paris agreement came at a time when the UK Government was kicking renewables quite hard, so that excitement didn’t necessarily permeate through. But we work closely with the government and I think a coherent strategy is being formed that’s going to continue the growth in clean energy over the next decade,” says Karl Harder, Joint Managing Director of Abundance, a British platform crowdfunding renewable energy projects.
“Solar in the UK is now close to competitive with retail energy prices, so you can roll out solar in certain situation subsidy free. The industry has taken a hit, but it will grow out of its recent setbacks,” he continues. Moreover, “Building wind farms in England is very difficult as the government has targeted wind in the planning system, but the Scottish Government is still supportive of wind and, due to the excellent wind resource, it’s feasible to build onshore wind in Scotland with little or no subsidy.”
Harder thinks the UK will find itself on a sustainable platform going forward and, in terms of crowdfunding for green energy, Brexit does not pose too much of a threat. “Ironically for us, Brexit is probably a positive for us in the immediate term, because it creates uncertainty for many of the larger players, and the more international players who finance things. Being a local company, smaller, more nimble, that actually plays quite well,” he says.
“There’s a big market in the UK and I feel fairly confident that whatever happens through Brexit, we will continue to grow strongly. I am also confident we will continue to attract European investors to our projects.”
Germany is leading the way in investing in wind energy. As it phases out nuclear power, it added more than five gigawatts (GW) of new power last year, 44 percent of the EU total – according to a report from the ‘WindEurope’ trade association. France, the Netherlands, Finland, Ireland and Lithuania also had a record year. But the picture varies elsewhere in the EU.
The renewable energy industry is calling for more ambitious targets to be set, to jump start green technology across the EU. According to the European Renewable Energies Federation (EREF), the current “business as usual” approach will not be sufficient to realise the intended energy transition.
“National targets have been abandoned in favour of an overall European target, without creating clear governance of it. You have to define where Europe wants to go and who is responsible,” an EREF spokesman tells youris.com. “The legally-binding Paris agreements on climate change will make it even more necessary to develop an ambitious clean energy policy in Europe, setting it clear for the member states what they’re expected to do to take their share.”
Munich-based WIP Renewable Energies is working with the European CrowdFundRES project, which aims to boost crowdfunding for green energy projects. It firmly believes that crowdfunding will help, but recognises that it is just a part of the solution.
“We still need the support of the governments if we want to reach the ambitious targets for renewable energy, in the end this is a political decision,” says spokeswoman Silvia Caneva. “The CrowdfundRES project can help, but a lot has to be done to meet the Paris climate agreement.”
By Damon Embling
Photo Credits: Arnaud Bouissou
15 May 2017